There has been widespread agitation on the need for companies to not only prioritise profit but also embrace a holistic approach that includes caring for their communities. This growing movement emphasises the importance of corporate social responsibility, urging businesses to give back to the societies in which they operate.
By investing in local initiatives, supporting social causes, and fostering a culture of empathy, companies can create a positive impact that extends beyond their bottom line. Such efforts not only enhance the well-being of the community but also build trust and loyalty among consumers, ultimately contributing to long-term success and sustainable growth.
Read also: Banks’ spend on CSR more than double amid rising poverty
The ability of a company to give back to the environment that houses it is termed corporate social responsibility (CSR).
CSR examined:
Ayozie (2016) described CSR as a process of addressing the environmental and social effects of an entity’s economic actions, benefiting a specific interest group within society or society at large.
From this definition, it can be further inferred as a tool aimed at combating societal ills and improving the quality of life for citizens in the long run.
The Finance Act 2023, as amended, provides that donations made by companies in cash or kind to any fund set up by the Federal Government, any State Government, etc., in response to any pandemic, natural disaster, or other exigency shall be allowed as deductions.
Interestingly, CSR is a multi-dimensional concept that goes far beyond profit maximisation, emphasising a firm’s total commitment to contributing positively to society.
It is an essential component of corporate governance, reflecting a commitment to best practices, ethical conduct, and, above all, accountability. CSR is a principle that guides a firm’s holistic efforts in contributing meaningfully and positively to the tripartite relationship of land, air, and water.
With the infusion of CSR ideologies, corporations blend their strategies with broader societal objectives, promoting transparency, accountability, trust, and sustainable business practices.
CSR is a driver for improving the quality of life for citizens and reducing societal problems if well implemented by the concerned entity.
Socially Responsible Investment (SRI), otherwise known as Ethical Investment, is an approach to investing that considers social and environmental issues alongside profit maximisation objectives.
SRI takes into consideration investors’ financial objectives in collaboration with social concerns such as socio-economic issues, social justice and equity, and compliance with relevant standards.
If well implemented, CSR will attract numerous benefits. It addresses socio-economic and environmental challenges, significantly impacting the welfare of any country and its citizens. CSR assists in job creation and employment generation, supports local businesses, and promotes economic opportunities for citizens and host communities. Additionally, CSR bridges governance gaps and provides social welfare safety nets. Most importantly, it delivers essential social welfare services such as roads, healthcare, education, housing, electricity, and potable drinking water to the masses.
In a nutshell, CSR encourages a firm to uphold its ethical values, norms, and ideologies while acting responsibly as a corporate entity. It drives businesses to go beyond mere profit-making, fostering a culture of integrity, transparency, and accountability. By integrating CSR into their core strategies, companies can make a tangible difference in addressing social and environmental issues.
In view of this, I urge us all to embrace the virtues of CSR as it is a powerful tool for combating societal ills and enhancing the quality of life for citizens. By committing to socially responsible practices, we can create a more equitable and sustainable future, where businesses thrive alongside the communities they serve. Let’s work together to ensure that our corporate actions contribute positively to society, setting a precedent for future generations to follow.
Kingsley Ndubueze Ayozie MSc (Finance) Lagos, MBA, ACSI (UK), FCTI, FCA – a Public Affairs Analyst and a Chartered Accountant by profession writes from Lagos.
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